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It’s no secret that gas prices have soared over the last year. In fact, we’ve seen gasoline prices skyrocket by almost 50% since September of 2020 across the country.

The reasons behind this increase in gas prices vary, ranging from disparities in refining and retail costs to disruption in oil distribution and fluctuations in taxes and state fees.

Regardless of the reason, these increases are causing drivers to think differently about the cars they drive and the fuel they use. And as a result, the demand for alternative-fuel vehicles continues to grow, with more ecologically sensitive motorists wanting clean-air alternatives to gas-powered cars, and cost-conscious buyers seeking to save money at the gas pump.

This trend has been driven from the top down. State and federal regulations have been made tougher, requiring automakers manufacture cars that meet stricter emissions standards and higher gas-mileage rules. Producing alternative-fuel vehicles helps meet those restrictions, while research into the related technologies drives innovation and leads to wider adoption.

Additionally, federal tax incentives are pushing people to look into alternative-fuel vehicles. At the federal level, individuals can receive a tax credit of up to $7,500 if they’ve purchased a new all-electric or plug-in hybrid vehicle since 2010. Most states also offer incentives for alternative-fuel vehicle ownership in the form of tax credits, grants and rebates.

But not all types of alternative-fuel vehicles are the same, and some have issues that can limit their appeal to drivers. “Where and how easily can I fuel up?” and “Does it come in the color I want, with the features I want?” are the types of questions consumers might ask before investing in an alternative-fuel vehicle. Learn more about the pros and cons of alternative fuel vehicles.

Types of alternative fuels and vehicles

For individual consumers, the options available for alternative-fuel vehicles run from two-seater sports cars and family sedans to pickup trucks and sport-utility vehicles.

Hybrid electric vehicles

The most common alternative-fuel vehicles are gas-electric hybrids (HEVs). Combining a gas and electric propulsion system, hybrids have been widely available in the U.S. for more than 20 years, with the Toyota Prius being the first mass-produced hybrid vehicle in 1997 .

These hybrid electric vehicles have continued to grow in popularity with some 50 models currently available for sale. The battery in gas-electric hybrids is charged from the engine and through braking, which then allows the battery to power the car at low speeds and during stops and starts.

Plug-in hybrid electric vehicles

Similar to the gas-electric hybrid, plug-in hybrids (PHEVs) have larger batteries that can run the car on electricity alone for limited distances with zero emissions. Owners can fill up their car with regular gas at the pump and then plug into an electric power source to recharge the battery.

Electric vehicles

Electric vehicles, or EVs, run solely on battery power, dispensing with the gas engine altogether. EVs have a specific range of miles they can travel before they need to be “refueled” by plugging them into an electrical power source, which can be a source of “range anxiety” for drivers. Available since 2010, EVs have grown in popularity as battery technology has increased their range, and the number of charging stations has risen both in cities and along highways.

Natural gas vehicles

The growth in natural gas as an energy source has also helped spur a rise in natural-gas-fueled vehicles. Similar to gas-powered cars, natural gas vehicles use compressed or liquefied natural gas and have cleaner emissions.

Fuel cell electric vehicles

For years, car companies have been researching and developing hydrogen-powered, fuel-cell vehicles (FCEVs), which come with the advantage of zero emissions and the potential for up to three times the efficiency of gas-powered cars. The vehicles have on-board fuel cells that run on compressed hydrogen. The fuel cells convert hydrogen and oxygen into electricity and in turn power an electric motor. With Honda’s Clarity Fuel Cell, Hyundai’s Nexo Fuel Cell SUV, and Toyota’s Mirai already on the road, the use of fuel cell technology is now appearing as a viable alternative to gas and electric cars – in fact, there are currently 9 vehicles on the road today that utilize this fuel cell technology. Factors currently inhibiting wider adoption of fuel cell vehicles include the cost of the cars, as well as a limited network of hydrogen fueling stations.

However, Hyundai Motor recently announced a collaboration to deploy its latest hydrogen fuel cell electric heavy-duty trucks in California which utilizes the XCIEN Fuel Cell. This is the world’s first mass-produced truck that uses hydrogen as fuel.

Currently, most hydrogen is made using natural gas, but new technologies such as those developed by HyperSolar could eliminate the use of all fossil fuels and could make FCEVs the cleanest, greenest cars on the road.

Flexible fuel vehicles

Meanwhile, flexible-fuel vehicles (FFVs) run on a mixture of gas and ethanol. Produced primarily from corn, ethanol has benefited from government mandates requiring more fuels be made from renewable sources. Flex-fuel vehicles currently have over 3,900 fueling stations across the U.S. and Canada.

Insure your alternative fuel vehicle

Just like with any other vehicle, it’s important that you know you’re covered no matter what life throws at you. Alternative-fuel vehicles offer a number of benefits, from tax credits to environmental implications and beyond. That’s why it’s important that you’ve got the insurance coverage that keeps you moving forward.

Nationwide offers comprehensive auto insurance plans to give you peace of mind when you’re out on the road. Learn more about our auto insurance coverage.

1https://www.eia.gov/petroleum/gasdiesel/
2https://fueleconomy.gov/feg/taxevb.shtml
3https://www.energy.gov/articles/history-electric-car
4https://afdc.energy.gov/vehicles/search
5https://www.hyundainews.com/en-us/releases/3362

Disclaimer:
The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Nationwide Mutual Insurance Company, its affiliates and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided. Nationwide, Nationwide is on your side, and the Nationwide N and Eagle are services marks of Nationwide Mutual Insurance Company. © 2021 Nationwide.

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